Brussels, 6 December 2012
Antitrust: Commission welcomes Court of Justice judgment in the AstraZeneca case
The European Commission welcomes today's judgment by the Court of Justice of the European Union (Case C-457/10 P) dismissing an appeal brought by AstraZeneca against the judgment by the General Court of 2010 which had upheld – to a very large extent - a Commission's decision from 2005. The Commission had fined AstraZeneca €60 million for abusing its dominant position relating to its best-selling anti-ulcer medicine Losec. The Court of Justice ruled for the first time on a Commission decision on the abuse of a dominant market position in the pharmaceutical sector. Today's judgment is significant as it clarifies a number of issues of principle in relation to market definition, dominance and the concept of an abuse in the meaning of Article 102 TFEU. In particular, it confirms that misuses of regulatory procedures can in certain circumstances constitute abuses of a dominant position within the meaning of EU antitrust rules (Article 102 of the Treaty on the Functioning of the European Union). The judgment also confirms the Commission's method to define the relevant product market and existence of a dominant position in the pharmaceutical sector.
In June 2005 the Commission adopted a decision fining AstraZeneca €60 million due to its infringements of Article 102 TFEU and Article 54 of the European Economic Area (EEA) Agreement (IP/05/737). The two infringements involved misuses by AZ of public procedures and regulations in a number of EEA states aimed at excluding generic firms and parallel traders from competing against AZ’s anti-ulcer product Losec.
In July 2010 the General Court (Case T-321/05: MEMO/10/294) very largely dismissed the appeal by AstraZeneca, upholding the Commission's decision. The General Court annulled part of the Commission's decision in respect of the second abuse, resulting in a lowering of the fine from 60 to 52.5 million euros.
The judgment concerns two types of misuses of regulatory procedures and systems. It does not concern abuses or misuses of patents or other intellectual property rights. The first abuse upheld by the Court today involved the provision of misleading information to national patent offices with the aim of preventing or delaying market entry of competing generic products. On the first abuse the Court found that the assessment whether representations made to public authorities for the purposes of improperly obtaining exclusive rights are misleading must be made in concreto and may vary according to the specific circumstances of each case.
The second abuse involved the deregistration of the market authorisation for AstraZeneca´s bestselling ulcer medicine Losec in selected countries with the aim of raising barriers against generic entry and parallel trade. The Court stated that an undertaking which holds a dominant position has a special responsibility under Article 102 and that it cannot therefore use regulatory procedures in such a way as to prevent or make more difficult entry of competitors on the market, in the absence of grounds relating to the defence of legitimate interests of an undertaking engaged in competition on the merits or in the absence of objective justification.
The Court found that the illegality of abusive conduct under Article 102 is unrelated to the compliance or non-compliance by an undertaking of other legal rules and that, in the majority of cases, abuses of dominant positions consist of behaviour which is otherwise lawful under branches of law other than competition law.
The Court´s judgment also clarifies many issues in relation to the product market definition. The judgment also confirms that IPRs constitute a factor relevant to the determination of dominance. The Court's judgment finds that a dominant position is not prohibited, only its abuse and a finding that an undertaking has such a position is not in itself a criticism of the undertaking concerned.
The Commission decision
On 15 June 2005 the Commission adopted a decision by which it found that AstraZeneca AB and AstraZeneca plc had committed two abuses of a dominant position. The first abuse consisted mainly of a pattern of allegedly misleading representations made before the patent offices in Germany, Belgium, Denmark, Norway, the Netherlands and the United Kingdom. The second abuse consisted of the submission of requests for deregistration of the marketing authorisations for Losec capsules in Denmark, Norway and Sweden combined with the withdrawal from the market of Losec capsules and the launch of a new version of that product (Losec MUPS tablets) in those three countries. The abuses found constituted abuses of regulatory proceedings. They did not involve abuse of patents or intellectual property rights.
The Commission imposed on AstraZeneca AB and AstraZeneca plc jointly and severally a fine of EUR 46 million and on AstraZeneca AB a fine of EUR 14 million.